Mandatory insurance for public works/The law is not enforced

2026-06-21 07:30:00, Aktualitet CNA

Builder's liability insurance is not only an obligation for residential buildings and buildings in general, but also for other engineering constructions.

Just as the builder is obliged to ensure his responsibilities when building a building, including and with particular focus on landslides, this obligation should also apply to the construction of roads or other public works.

If a road collapses within 10 years of its construction, the insurance beneficiary, in this case the state, must be compensated by the insurance company. In fact, examples of road damage occurring very soon after construction have occurred, such as the Burrel Ring Road.

In December 2022, the Council of Ministers approved a decision to determine the general conditions and elements of professional liability insurance for the designer, the design group and the implementer of the works, as well as the rules and elements of developer liability insurance for all constructions worth over 100 million lek.

The licensed designer is obliged to conclude a professional liability insurance contract. The professional liability insurance contract covers any damage that may be caused as a result of his activity during the construction process of the facility.

The insurance amount is calculated by covering any necessary and unavoidable expenses of the new design, as well as additional expenses incurred by the developer or public administration bodies, which have arisen as a result of design errors, as well as additional costs that may arise for the developer, as a result of design errors during the implementation of the project.

The contractor, as a licensed legal entity, is also obliged to conclude a professional liability insurance contract. The professional liability insurance contract covers any damage that may be caused as a result of his activity during the construction process of the facility.

The insurance amount is calculated by covering at least any necessary and unavoidable expenses for the performance of new works, as well as additional expenses incurred by the developer or public administration bodies, which have arisen as a result of the implementation of the works in violation of the relevant contract for the implementation of construction works, the planning and development documents, as well as the legislation in force regulating construction activity.

The developer, as a natural or legal person, is obliged to conclude a professional liability insurance contract for all constructions worth over 100 million lek. The professional liability insurance contract covers any damage that may be caused by risks during the development process against third parties.

The insurance amount is calculated as a percentage of the estimated cost of the implementation works, excluding Value Added Tax. This amount will not exceed 15% of the estimated cost of the works.

But, according to insurers, this legal obligation of entities that construct public works is almost never implemented, with rare exceptions, mainly in the cases of foreign companies. /Monitor